Highlights of Budget Deal

ByUnited Press InternationalOctober 29, 1990

WASHINGTON
— THE budget bill passed Saturday aims to cut $490 billion from the federal deficit over five years. Among its key provisions: Income Taxes: A new top tax rate of 31 percent. That would be an increase from 28 percent for about 600,000 highest income Americans and a cut from 33 percent for about 5.3 million upper-middle-income taxpayers.

State and local employees: Extends Social Security taxes to state and local employees without other pensions.

Income tax credit: A five-year expansion of the earned income tax credit for the working poor.

Oil: $2.5 billion in tax benefits for oil and gas drillers and $1.4 billion in tax breaks for small businesses over five years.

Medicare: About $10 billion savings by increasing the deductible and increasing premiums. About $34 billion in savings through reduced reimbursements to doctors and hospitals.

Medicaid: Savings of about $600 million over 5 years through drug discounts and from paying private insurance if it is cheaper, although providing expanded coverage for children, the frail elderly, and the mentally retarded.